Excerpt: - .....division bench of that court) good year (india) ltd. v. industrial tribunal , and sri krishna jute mills v. government of andhra pradesh (1977) 2 l.l.j. 363 : (1977) lab. i.c. 988 : (1976)2 a.w.r. 300 : (1976) 50 f.j.r. 435 : (1976) 35 f.l.r. 93, wherein the learned judges were of the view that no notice was necessary, when the government acted for the second time under section, 10 of the act.14 having regard to the weight of authority prevailing in this court since 1970 which gained acceptance in some of the other courts in our country, and having regard to the observations of the supreme court in kraipak's case : [1970]1scr457 , we are of the view that the decision in tiruchi steel rolling mills ltd v. gnanasa nbandam (1974) 46 f.j.r. 158, has to be accepted as having laid down the.....

Judgment:ORDER

The following notification and the annexure shall be published in the next issue of the Official Gazette.

Whereas the Government are of the opinion that an Industrial Dispute has arisen between the Management of M/s. New Horizon Sugar Mills Pte. Ltd, Ariyur, Pondicherry, and its workmen in respect of the matter mentioned in the Annexure to this Order;

And whereas in the opinion of the Lt. Governor of the Union Territory (i) Pondicherry it is necessary, to refer the said dispute for adjudication Now, therefore, in exercise of the powers conferred by Clause (c) of Sub-section (1) of Section 10 of the Industrial Disputes Act, 1947(Central Act XIV of 1947) the Lt. Governor. Pondicherry, hereby directs that the said dispute be referred to the Labour Court, Pondicherry, for adjudication.

Annexure : 'Whether the non-employment of Thiru C. Muthukrishnan is justified and if not to what relief he is entitled? to compute the relief, if any, awarded in terms of money if it can be so computed.' (By order of the Lt. Governor)(A. Chandrasekhara Menon) Secretary to Government.

On this, the Presiding Officer, Labour Court, Pondicherry, took up the subject-matter on file and issued notices to the management to appear before him. As they did not appear they were set ex parte. He was of the view that the charge levelled against the workman was not proved beyond reasonable doubt and in those circumstances, directed the management to reinstate the worker with back wages. The management questioned the award of the Labour Court in W.P. No. 2329 of 1976. They referred to the order of the State Government, dated 31st March, 1976 excerpted above and factually submitted that no opportunity was given to them to show cause why the earlier order should be reviewed or revoked. In the affidavit in support of the writ petition they would say that the petitioner mills is not even aware of the circumstances under which the earlier order was superseded. They would allege that there should have been some pressure, political or otherwise on the Government to reopen the earlier order refusing to refer the dispute for adjudication. The further allegation of the mills is that the Labour Court was wrong in having set the mills ex parte and for having pissed an award directing the reinstatement of the workman who was impleaded as the third respondent They would refer to the modus operandi adopted by the Labour Court. In particular they admitted that a first notice dated 1st April, 1976 issued by the Labour Court was received by them on 3rd April, 1979 under which the workman was called upon to file his state-meat of claim by 23rd April, 1976 and furnish copies of such a claim statement to the petitioner mills. IE also directed the petitioner to file an answer statement within two weeks from the date of the receipt of the claim statement. No date, however, was fixed for the hearing of the reference. The complaint of the mills is than on 27th April, 1976, they received another notice from the Labour Court dated 24th April, 1976 whereunder the workman for a second time (which means the workman has not filed his claim statement till then) was called upon to file his claim statement into Court on or before 7th May, 1976. The Mills were also given the usual time to file their reply statement. In the second notice also no date was fixed for the hearing of the case. The complaint of the petitioner mills is that they have not received either from the workman or any one representing him or from the Labour Court any claim statement or any other document which might have been put into the Labour Court by the workman. The emphatic case of the petitioner mills is that they were not informed of the date of the hearing of the reference and as no notice to that effect had been served on the petitioner, there was no occasion for the petitioner to arrange for its being represented in Court to attend the hearing of the case. They expressed surprise that in the above circumstances they were set ex parte by the Labour Court. Their final complaint against the award, dated 21st May, 1976 challenged in the writ petition is that the award is a nullity as being opprosed to the principles of natural justice, as it has been passed behind the back of the petitioner and as no notice was given by the Labour Court, it is against all accepted principles of law. Their main contention is that the Government of Pondicherry having declined to make any reference for adjudication under Section 10 of the Industrial Disputes Act, they had no jurisdiction to make the reference subsequently at the instance of the workman without hearing the petitioner or without giving an opportunity to the petitioner and hence, the order of reference, dated 31st March, 1976 is ultra vires the power of the Government. In those circumstances, it is contended that the Labour Court had no jurisdiction to entertain the (subject-matter and in consequence, Therefore, the award passed by the Labour Court, Pondicherry on 25th May, 1976 is a nullity and has to be set aside. They sought for a writ of certiorari to quash the award in the above circumstances.

3. The writ petition came up before Mohan, J. on 16th July, 1976. The learned Judge relying on earlier decisions of his in W.P. No 2388 of 1975 and W P. No. 344 of 1975 was of the view that the reference itself was bad, and, therefore, the Labour Court did not have any jurisdiction to adjudicate upon the matter referred to it, since the jurisdiction of the Court springs only from a competent reference. He also added that i was open to the Government of Pondicherry to make a reference if they so choose after hearing the representation

4. The workman filed an appeal W. A No. 249 of 1976 In the memorandum of grounds and before us also, it was contended than the Government need not have heard the petitioner mills before referring the dispute relating to the non-employment of the workman. It was stated that as the State Government was not exercising judicial or quasi-judicial function but only an administrative one there was no obligation cast 01 the Government to hear the management before making a reference event in a case where a reference was once declined. The particular ground on which the appeal is based is that the principles of natural justice would not apply when the State Government is exercising administrative functions. They question therefore, the decision of the learned single Judge of our Court.

5. Before us Mr. Dolia laid accent on the memorandum of grounds of appeal and contended that there was no exhaustion of the power of the Government when they refused to make a reference in the first instance. This proposition is beyond dispute. But Mr. Dolia's contention was that if the worker seeks for a reference a second time and while doing so, brings to the notice of the Government certain additional facts and materials, the Government though acting administratively should exercise such functions as are available under the Industrial Disputes Act, and even so without referring to the management of such an invocation of power, refer the subject-matter to the Labour Court. Mr. Dolia stressed the first part of his argument and contended that as there was no exhaustion of power at any point of time the Government for a second time and without reference to the management who is the primary party to be heard in such matters can act and call upon the Labour Court to adjudicate such a dispute. It is this second limb of the argument which is a poser for our main consideration.

6. Natural justice has acquired a legalistic and artistic connotation by passage of time. In the recent past the principles of natural justice such as audi alterem partem (no man should be condemned without being heard) have been invoked only in proceedings before a judicial or quasi-judicial tribunal. There was a lurking dislike to invoke the same, while administrative Tribunals, who are to give decisions on matters before them, were in action. Even in England, as late as in 1948, the House of Lords felt that natural justice had no part to play where an administrative decision was to be taken by an authority functioning under a statuter , Franklin v. Minister of Town and Country Planning 1948 A.C. 37. However, in 1963 the above thinking was scotched by the House of Lords in Ridge v. Baldwin 1964 A.C. 40. As principles of natural justice revolve round fair-play in action and as justice should not only be done but also seem to be done, any decision taken even by an administrative authority, acting under a Statute, should reflect a normal sense of what is right and what is wrong. Though the precise contours of the principles of natural justice are not easy to define, yet no person, as is likely to suffer any civil consequences, must be adjudged, unless he has notice of the proceedings and unless he has an opportunity of stating his case fully. Seneca (about 4 B. C.), the famous Stoic philosopher, who was tutor to emperor Nero, sang:

Whoever should adjudge anything. the other party not having been heard; Even though he should decide fairly, it would scarcely be fair.

Thus it is seen that one of the well known maxims audi alterem partem, which springs from the principles of natural justice, dictates that no man shall be condemned to a consequence unheard. This rule cannot, therefore, be confined strictly to the conduct of legal proceedings, but ought to be made applicable to a body who is invested with the authority to adjudicate upon matters involving civil consequences to individuals.

7. The peripheries of the principles of natural justice have been expanding dimensionally allwise. Avoidance of obeisance to such principles has been understood as avoidance of jurisdiction. This is clear from the decision of the House of Lords in Anismicnic Ltd. v. Foreign Compensation Commission (1969) 2 A. C. 147. Mathew, J. speaking for the Supreme Court in M.L. Sethi v. R.P. Kapur : [1973]1SCR697 observed thus-

The word 'jurisdiction' is a verbal cast of many colours. Jurisdiction originally seems to have had the meaning which Lord Reid ascribed to it in Anismicnic Ltd. v. Foreign Compensation Commission (1969) 2 A. C. 147 namely the entitlement to enter upon the enquiry in question'. If there was an entitlement to enter upon an inquiry into the question; then any subsequent er or could only be regarded as an error within the jurisdiction, toe best known formulation of this theory is that made by Lord Henman in R. v. Balton (1841) 1 Q.B. 66. He said that the question of jurisdiction is determinate at the commencement, not at the cenclution of the enquiry. In Anismicnic Ltd (1969) 2 A. C. 147. Lord Reid said. But there are many cases where, although the Tribunal had jurisdiction to enter on the enquiry, it has done or failed to do something in the course of the enquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision which it had no power to make. It may have failed in the course of the enquiry to comply with the requirements of natural justice It may in perfect good faith have misconstrued the provision giving it power to act so that it failed to deal with the question remitted to it and decided some question, which was not remitted to it. It may have refused to take into account something which it was required to take into account. Or it may have based its decision on some matter which under the provisions setting it up, it had no right to take into account. I do not intend this list to be exhaustive.

In the same case Lord Pearce said--'Lack of jurisdiction may arise in various ways. There may be an absence of those formalities or things which are conditions precedent to the tribunal having any jurisdiction to embark on an enquiry Or the Tribunal may at the end make an order that it has no jurisdiction to make. Or in the intervening stage while engaged on a proper enquiry the Tribunal may depart from the rules of natural justice; or it may ask itself the wrong questions; or it may take into account matters which it was not directed to take into account. Thereby it would step outside its jurisdiction. It would turn its enquiry into something not directed by Parliament and fail to make the enquiry which the Parliament did direct. Any of these things would cause its purported decision to be a nulity.

Thus, therefore, the principles of natural justice appear to be equally invocable even in a case where an administrative decision is taken by a statutory functionary. Failure to adhere to such principles would result in a decision which is a nullity because of total absence of jurisdiction.

8. In the above background let us consider matters which might arise in an industry. An industry is a society within a total society, being a segment of it. It projects rights and privileges which workers have in juxtaposition to such rights and privileges which employers have. In the words of a famous author 'Industrial relations' means as they do, a totality of life, a diversity of inter-relations between labour, employer, consumer and Government. Thus, therefore, if a matter which has an impact on such relationship, comes up for scrutiny and it becomes necessary for statutory functionaries under the 'Industrial Disputes Act, including the Government to take a decision on certain ma iters coming up before them, then the Government though acting in an administrative capacity, should appreciate that it is a body vested with authority to adjudicate upon matters involving civil consequences to individuals.

9. In the instant case the Government firstly refused to refer the dispute which arose between the workmen and the mills to a Labour Court for adjudication. By such a non-reference there is no exhaustion of power. As pointed out by the Supreme Court in Aven Services v. Industrial Tribunal : (1979)ILLJ1SC .

Therefore, when the Government declines to make a reference the source of power is neither dried up nor exhausted. It only indicates that the Government for the time being refused to exercise the power but that does not denude the power. The power to make the reference remains in fact and can be exercised if the material, and relevant considerations for exercise of power are available, they being the continued existence of the dispute and the wisdom of referring it in the larger interest of industrial peace and harmony. Refusal to make the reference does not tantamount to saying that the dispute, if it at all existed, stands resolved. On the contrary the refusal to make a reference, not compelling the parties to come to a talking table or before a quasi-judicial tribunal, would further accentuate the feelings and a threat to direct action may become imminent and the Government may as well reconsider the decision and make the reference. It is therefore, not possible to accept the submission that, if the Government had on an earlier occasion declined to make a reference, unless it be shown that there was some fresh or additional material before the Government, the second reference would be incompetent.

Mr. Dolia laid considerable stress on the above passage and contended that in the name of expediency the Government was right in having made the reference at the subsequent stage in the instant case. We are unable to agree with this contention and accept the proposition that in the above statement of law made by the Supreme Court, it was the intendment of the Supreme Court that, when the Government made a second reference, after their first refusal, they need not give notice to the other party, and that they could straightaway act on a memorandum presented to them by one of the two parties who could request them for such an administrative action.

10. As early as in 1972 in Abdul Salam and Co. v. State of Tamil Nadu (1973) 43 F.J.R. 180(to which one of us was a party), this Court made the following observation (headnote):

Though the jurisdiction exercised by the appropriate Government, while making a reference under Section 10(1) (c) of the Industrial Disputes Act, L947, is administrative in nature yet, while it makes a reference, it cannot be said that the said order, act or thing done by the Government is a pure and simple administrative act without any impact upon the rights of the parties...If the Government having refused to refer an alleged industrial dispute for adjudication, subsequently re-exercises its power and refers the dispute for adjudication solely on the further representations made by the representatives of the workmen, without giving the employer an opportunity to rebut the content and scope of such representations, the subsequent order, being violative of the well-known rule of fair hearing, would be unjust.

The Court concluded by saying that, if the Government suo motu changed their mind without anyone prompting them to do so and wanted to exercise their inherent power on the same material which was considered by them in the first instance, then the position would be different.

11. This decision was followed by a Division Bench of this Court in Tiruchi Steel Rolling Mills Ltd. v. Gnanavambandan (1974) F.J.R. 158. Veeraswami, C J speaking for the Bench, while leaving open the question whether the principles of natural justice would apply to every administrative order, hold on the facts that such principles were applicable and that the Government's second order of reference made without giving notice to the employer was invalid.

12. This decision was followed by ismail, J. in 1974 in W.P. No. 3232 of 1971, in 1975 by v, Ramaswami, J. in W P No. 4671 of 1975; in 1979 by Mohan, J. W.P. No. 3006 of 1974 and in 1979 Padmanabhan, J. in W.P. No 784 of 1979. The view expressed by one of us in Abdul Salam Co v. State of Tamil Nadu (1973) 43 F.J. R. 180 was followed by a Division Bench of the Karnataka High Court in Indian Telephone Industries Ltd v. State of Karnataka (1978) 1 L. L. J. 544. (1978) Lab. I.C. 1779 : 53 F.J.R. 16 : (1978)2 Karn. L.J. 294, which in turn, differed from the earlier view taken by a single Judge of that High Court. A single Judge of the Calcutta High Court in a recent case in American Express Inter national Banking Corporation v. Union of India (1979) 2 L.L.J. 22, adopted the same view. On the broader question, Abdul Salam and Co. v. State of Tamil Nadu (1973) 43 F. J. R. 180, followed the dicta in A. K. Kra pak v. Union of India : [1970]1SCR457 , which stated:

The dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated.... In a welfare State like India which is regulated and controlled by] the rule of law it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of rule of law would lose its vitality if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner. What was considered as an administrative power some years back is now being considered as a quasi-judicial power.

13. Mr. Dolia, however, referred to the decision in Workman of Dalmia Cement v. State of Madras : (1969)ILLJ499Mad , a judgment of a single Judge of this Court : Kirloskar Electric Co Ltd, v. Workmen of Kirloskar Electric Co. Ltd. (1974)2 L.L.J. 537 : 45 F.J.R. 158 : (1975) Lab. I.C. 124, a judgment of a single Judge of the Karnataka High Court, (which was subsequently dissented from by a Division Bench of that Court) Good Year (India) Ltd. v. Industrial Tribunal , and Sri Krishna Jute Mills v. Government of Andhra Pradesh (1977) 2 L.L.J. 363 : (1977) Lab. I.C. 988 : (1976)2 A.W.R. 300 : (1976) 50 F.J.R. 435 : (1976) 35 F.L.R. 93, wherein the learned Judges were of the view that no notice was necessary, when the Government acted for the second time under section, 10 of the Act.

14 Having regard to the weight of authority prevailing in this Court since 1970 which gained acceptance in some of the other Courts in our country, and having regard to the observations of the Supreme Court in Kraipak's case : [1970]1SCR457 , we are of the view that the decision in Tiruchi Steel Rolling Mills Ltd v. Gnanasa nbandam (1974) 46 F.J.R. 158, has to be accepted as having laid down the correct law on the subject. In this view of the matter, we hold that the State Government of Pondicherry when it made the reference acting for the second time, in exercise of its statutorv power under Section 10 of the Act, did not act fairly, in that it did not hear the mills in question. It therefore, follows that the award passed by the Labour Court Pondicherry, pursuant to such reference made by the Government, is also a nullity and made without jurisdiction, and has therefore, to be quashed. the order of Mohan, J. is upheld and the appeal is dismissed. There will be no order as to costs.

15. As stare decisis is one of the accepted methods and guidalines ready for Courts to be adopted and to be encouraged and as the weight of authority of decisions rendered in similar circumstances is against the petitioner and as the question involved is, in our view, not a matter of general importance which has to be decided by the Supreme Court, the oral application for leave to appeal against the judgment is refused.